Sitting pretty in Schaumburg

While other communities struggle with budgets, village poised to cut property tax, other fees

September 27, 2010|By Kate Thayer and Lisa Black, Tribune reporters

While most communities have labored under painful cutbacks and tax hikes to keep services afloat, Schaumburg officials are poised to do something highly unusual — vote to lower taxes.

The Village Board will consider Tuesday a 4.4 percent reduction to the 2010 property tax levy. In a double dip of potentially good news, residents could also see their garbage fees and vehicle stickers eliminated if the proposal is approved.

Village officials are following through on promises made to residents when they established a property tax last year for the first time in the village's history. Because sales and hotel taxes are higher than expected, officials said Monday that they believe they can make ends meet with less revenue.

While some communities report improvements in the local economy, Schaumburg apparently remains an anomaly in its bid to decrease taxes.

"I have to research this Schaumburg windfall more and find out what their magic potion is," said Paul Grimes, Orland Park's village manager.

The last tax reduction of note came in December, when Cook County commissioners rolled back half a percentage point of an unpopular sales tax rate after a lengthy political slugfest. Earlier this month, the county commissioners sent a letter to municipalities that urged them to follow suit and lower taxes — a move that Schaumburg Village President Al Larson described as a "political stunt."

Some Schaumburg residents, while grateful for the proposed reductions, questioned the future of the property tax. Others wondered about the timing of the move, just months before the municipal election. Larson has not said if he plans to run for re-election.

"Obviously nobody's happy about (property taxes)," said Karen Vujtech, who has lived in Schaumburg for 20 years. "The village seems to be trying to do its best to keep (property taxes) a wash with lowering other fees. I just don't want it to increase in the future."

Elsewhere, many municipal officials are struggling to scrape up revenue, just to break even.

Orland Park is considering doubling its vehicle sticker fee from $15 for two years to $30. Joliet expects a $30 million budget deficit this year and offered an employee buyout last summer that reaped $2 million.

In Gurnee, which does not have a property tax, officials raised the telecommunications tax to 6 percent — up from 1 percent — in order to patch a projected $600,000 deficit.

But in Northbrook, officials reported a financial improvement. It initially planned for a $30,000 surplus in its general fund by April 30. Instead, they have updated their figures to project a $300,000 surplus, said Jeff Rowitz, finance director.

The village did not raise taxes or fees this year, but "we didn't lower any either," he said.

In Schaumburg, the proposed levy, or what is collected from property taxes, is about $22.7 million, down from last year's $23.7 million.

Officials approved the property tax last year because revenue from other sources was slumping. At the time, board members promised to reduce the tax if other revenue improved, Village Manager Ken Fritz said.

They also promised to eliminate the vehicle sticker fees and said the village would take over the cost of garbage collection.

"We have tried to offset the impact as best we can," Larson said.

Sales tax revenue is up about 3 percent, and revenue from the hotel tax is up about 6.2 percent, officials said. That additional revenue, combined with changes in the village's contribution to police and fire pensions — which is stock market-driven — allows cutting the tax levy, said Doug Ellsworth, finance director.

If the proposed levy is approved, homeowners with a $250,000 home with an equalized assessed value of $60,000 will pay about $289 for the village's portion of their property tax bill, which is about $12 less than last year.

The decades-old vehicle stickers have an average annual cost of about $20. The other fee, for garbage pickup, is scheduled to expire in January. Ellsworth said residents pay an average of about $180 a year, but that property taxes will cover pickup beginning next year.

The cuts will offset all but about $70 of the village's portion of the property tax for a person owning a $250,000 house and two cars, village officials say.

If the tax proposal wins initial approval, it must be discussed at two more meetings, with a final vote expected at the Nov. 9 meeting.

Brian Costin, who is running for village president, said the need for a property tax could have been headed off.

"If the village controlled spending, they could eliminate property taxes all together," he said, pledging he would repeal the tax within his first term.

To Larson, that's just political rhetoric.

"We do all kinds of good things, and it's not because it is, or isn't, an election year," he said. "It's because it's the right thing to do."